In land acquisition, depending upon the purpose of acquisition, the deduction for development cost may vary from 20% to 75% ; SC.

Supreme Court of India

Justice R. Banumathi & Justice A.S. Bopanna

The SC on March 17, 2020 {SAJAN v. STATE OF MAHARASHTRA AND OTHERS} held that in case of compensation payable due to land acquisition, rule of one-third deduction towards development is the general rule. But depending upon the purpose of acquisition and taking note of well planned layouts, if any, the deduction for development cost may vary from 20% to 75%.

It was held that in the present case, since the land was acquired for the construction of Hiwra Dam project, much of the development like in the case of a layout for housing colony is not required. It was held that 40% deduction made by the High Court appears to be on the higher side. Considering the purpose of the acquisition and the facts and circumstances of the case, it was held by the SC that 20% deduction for development cost would be reasonable. Accordingly the compensation was enhanced by the SC - while partly allowing the appeal. 

In the present case, the appeals had been filed by the appellants assailing the impugned judgment  passed by the High Court of  Bombay by which the High Court partly allowed the appeal and inter-alia reduced the compensation for the land by giving 40% deduction towards development cost. The said deduction was reduced to 20 % by the SC - by partly allowing the appeal as aforesaid.